Plan to Expand Companies Receiving Medicaid Contracts in Kentucky Could be Put on Hold

A Kentucky lawmaker says implementation of a federal mandate to allow private companies to compete for Medicaid contracts in Louisville could be delayed. Currently, Medicaid in Louisville and the surrounding area is managed by the private company Passport Health Plan. But the federal government has ordered Kentucky to open the area to competition. And the company United Healthcare is already attempting to gain a foothold in the region.

It's also widely believed that the state's other three managed care operators--CoventryCares, Kentucky Spirit and WellCare--would also want to bid for the Louisville region contracts

But today, the Cabinet for Health and Family Services announced they would extend Passport’s contract to the end of this year and start accepting other bids for services in 2013 and beyond.

House Health and Welfare chairman Tom Burch says rushing competition could be dangerous, and Kentucky should ask the government to further delay the order.

“I don’t know this to be a fact but I believe they can do this for a period of time, say for a year, until we get these others ones online. The federal government doesn’t want to come in here and mess everything up for the sake of competition,” he says.

Under Burch's plan, Passport would still operate exclusively until 2014, when the statewide contracts expire. Then, all regions could be openly bid on that year instead of continuing to separate them into Louisville region and other statewide regions.

Burch says United’s early moves aren’t good for the state.

“Personally, I think it’s wrong to do that or to allow that to happen because Passport has a proven record. They’ve got 16 counties now that they serve very well," he says.

United says they sent the letters based on news reports saying the region would be opening up to competition.